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Almost everything Americans ever read or hear about economic competitiveness carries forward the story line that the United States is falling behind foreign economies and Something Must Be Done About It.

Our competitiveness problems concern finance, education, science, technology, social cooperation, immigration, taxation, regulation, and more. Symptoms include a negative balance of trade, outsourcing of jobs, outright departures of American companies, declining upward mobility, and so on. Something Must Be Done About It.

Indeed, the U.S. has been doing something about it for 30 years or more. Competiveness is a major bureaucratic concern of the White House, the State, Treasury, Commerce, and Labor Departments; the office of the U.S. Trade Representative; the U.S. International Trade Commission; and an unhealthy dose of other executive agencies.

Congress has committees and subcommittees and caucuses concerned with competitiveness. Bills are introduced nearly every month trying to improve U.S. competitiveness, generating hearings, and press releases. In the quasi-private sector, there's a Council on Competitiveness competing for attention with other nongovernmental nonprofit organizations that aim to improve U.S. economic competitiveness. Businesses have combined to lobby and educate on the struggle to retain economic competitiveness.

It was a pleasant surprise the other day to encounter a different story, published by a well-regarded Swiss business school called IMD (formerly the Institute for Management Development). It operates a World Competitiveness Center, which may sound like more of the same old stuff, but the new report shows a different way of thinking.

The U.S. was ranked second for 2011, behind Hong Kong. The bad news is that it was first in 2010 and most years before, but it's worth contemplating the advantages that a group of international business executives and analysts still can find in the U.S. economy.

At the top is access to financing, followed by a strong research-and-development culture, an effective legal environment, dynamism of the economy, a skilled workforce, and reliable infrastructure. At the bottom, they find the U.S. lacks competency of government and a competitive tax regime.

All of the top six assets are usually cited as American problems by competitiveness experts, especially those in government, while we rarely meet officials aware that American governments and their tax system are so poorly regarded. The experts rarely work on economic problems created by government.

It's also important to consider a lesson from the new world leader in competitiveness. Hong Kong has an unnatural advantage over other economies, which is that it has no natural advantages. Built by 19th-century British traders on a barren rock, Hong Kong has no domestic energy supplies, no domestic sources of raw materials, and hardly any room for domestic agriculture. All it has are people, seven million people on its 424 square miles, nearly all of whom are descended from people who came to Hong Kong with nothing except a desire to shed their oppressive government and make their way in a freer place.

Hong Kong enjoys one of the least helpful governments on the planet, especially in trade. Hong Kong creates a "level playing field" by turning its back on subsidies and barriers intended to help its businesses.

Though the U.S. is not so enlightened about free trade, and is munificently endowed with natural resources, it does resemble Hong Kong in the use of the world's most important resource, people. Nearly everyone in the U.S. is descended from people who arrived with little or nothing in the way of financial capital or individual advantages.

If the U.S. wants to continue to be competitive, it should open its doors still wider to individuals who want to compete.

Who Lost Wisconsin?

Making a loud case for a bad cause

In the agony of defeat, Democrats blamed their failure to unseat Wisconsin Gov. Scott Walker on a variety of plausible factors. They said Republicans mastered the technology of turning out their key voters. They said Republicans raised a lot more money outside the state and spent lavishly on media.

On the other hand, the political forces of organized labor turned out their unpaid army to work on Democratic voter turnout. The Democrats had spent heavily themselves to collect nearly a million signatures to put the recall onto the ballot and they spent lavishly on media to decide on their nominee in a primary election—efforts that should have helped condition the electorate to remove Walker.

After all the effort on both sides, the campaign against Walker was ineffectual: Wisconsin voters gave the governor about the same margin over the mayor of Milwaukee that they had in the 2010 election.

The explanation of the election result comes in three parts:

First, the Democrats selected a candidate who had actually used the provisions of the Republican reform of public employee bargaining to bring his city budget $17 million closer to balance. He contracted for teachers' health insurance with a company not controlled by the teachers' union.

Second, more than half the people of Wisconsin who voted last week were not as outraged by the attack on government unions as were the teachers and other public employees who swarmed the state capitol last year. Indeed, some voters may have been outraged by the employees' behavior in the streets of Madison.

Third and most importantly, the governor and legislature were right to take away the unions' privilege to negotiate contract provisions beyond those directly affecting wages, and they were right to open the public shop and make membership, dues payments, and associated political contributions voluntary.

Hypocrisy, anarchy, and servitude are not easy to sell in any state, not even the state that was first to make the mistake of allowing protected civil-service workers to join unions.